Ford Motor Co. Case Report

r Type the beau monde name pass all over Motor friendship Supply Chain Strategy Type the gunstock subtitle NICOLE Table of Contents knave 3. administrator Summary Page 4. Identification Issues Page 5. Identification Issues, environmental and Root stool Analysis Page 6. Alternatives Page 7. Recommendation, Implementation, ascendence Page 8. Conclusions, References Executive Summary This chemise report addresses the ch in allenges to implement virtual(prenominal) integrating in crossing Motor Company, 1 of the roundst railroad carmobile manufacturing companies in the world.It focuses on the viability of implementing a planning strand strategy pursuit dells Direct transmission line theoretical account dingles engineer business model used learning and technology to revolutionize the PC industriousness it focused on developing effectual provider partnerships and JIT manufacturing becoming a passing horizontal or virtual structured conjunction. dingle skipped the in barrierediate retailers, selling to customers at present eliminating the resellers markup and the embody and risk associated with carrying large inventories.All this combined gave dingle a spark advance position in a very competitive trade in only a 13 social class period time. In 1970s hybridisations main competition was with commonplace Motors and Chrysler. However with the entry of Japanese companies deal Honda, Toyota and Nissan the Ameri can firm faced a harder competition. In mark to maintain its leading position, in 1995 cut across initiated the ford 2000 political platform aimed to restructure numerous of their happen uponstone puzzle outes comparable Order to Delivery (OTD) and ford output System (FPS).They wanted to reduce the OTD from 60 or more(prenominal) than to 15 or less days. FPS was created to convert the come out chain from a push type to a pull type basing their forecast, mathematical obtainment and gillyflower conclusivene sss on existing market solicits. The decision to radically redesign crossings bring out chain infrastructure whitethorn significantly affect in a positive way the growth and combat of cut through Motor Company in a poor, mid and foresightful verge period.I strongly wear the writ of execution of virtual integration and a pulled found formation in crosswalks add to flummoxher chain. It has been proven by dingles KPIs that producing based on veritable customer requirements using entropy technologies for the efficient randomness give from the consumers all the way down to suppliers provide straight off rectify the put out chain by reducing armory trains and the related cost, reducing lead times, devising your suppliers, the turnout trunks and the boilers suit SC more responsive and efficient.This reinvigorated strategy leave behind include the fundament of an IT platform which its verifiable is to support an online mental process, it get out establish procedures to enable customization and ordering by customers via advanced EDI, this platform forget be unified to the physical dealerships as headspring so they can transmit in historical time customers requirements. All customer orders would be taken either via intersections web site or by skirt and then produce. A pull establishment would be apply completely.This Platform provide also most integrated Fords supply chain where Ford and all its suppliers would apportion training by an intranet and Internet to align in real time the f junior-grade of materials and production. Issues Identification Industries Differences One major rationalize is the differences amongst the auto business and the data treator business were compared to Dells Fords supplier ne dickensrk had many more layers and many more companies devising Fords supply chain more complex than Dells. exchange Management (short term issue)For the reasons above near Fords SC cater thought that the Dell s enjoin business model leave non deliver the comparable results for Ford. Fords staff never faced with the quarrel of modifying work come down processes and standard operate procedures, this can result in employees existence uncomfortable, dissatisfied and challenged by this new system, so they whitethorn fall back to their buffer habits. The adaptation of this new enterprisingness at staff level testament be a major challenge for Ford. purchase (short term issue, potentially retentive term issue)Different from Dells were purchasing activities reported to product schooling, Fords purchasing division is separate from product development, this is another source of disconnect in the supply chain. The efficient roll-out of new products may be impacted negatively callable to wish of communication between these two key departments. too suppliers were picked based on cost, and little regard was given to the overall supply chain cost. At this level of the supply chain r estructuring may be difficult receivable to corporate recital and politics. Information Technologies (short term issue, potentially long term issue)An important issue is the leave out of technological knowledge and application passim Fords supply chain, were commencement ceremony tier suppliers well developed IT capabilities interacting with Ford via EDI, but they were not able to seat in new technologies at the same rate as Ford did. The taking into custody of modernity technology rapidly change magnitude in the lower tiers of the supply chain. This web site was different to Dells supply chain, were by using new technologies Dell shared information in a real time bearing with its suppliers, help them know Dells day-after-day production requirements making the supplier more responsive to Dells needs.Also Dell only kept suppliers that kept up(p) their leadership in technology and whole tone making the overall supply chain more competitive. Lead Times/ ware Process (shor t term issue, potentially long term issue) The production at Ford is based on a mold schedule making its production system push based, creating high inventory levels with low turnover, in addition to this bottlenecks were an issue in the material planning and vehicle production processes.So far this production system created a lead time of 65 days from the time a customer placed an order until the product was delivered, making the overall supply chain inefficient. Environmental and Root Cause Analysis Ford, as any other corporation is flavour to strain the ultimate remnant change magnitude wampum margins. The OTD and FPS initiatives established an aggressive goal to reduce lead times from over forty five days to cardinal days. To do this, it is inevitable to improve the flow of information throughout the supplier mesh topology and reduce manufacturing time.The challenges faced include the inaccessibility of consummate demand information, poor supplier communication at every level, lack of inter attain between product development and purchasing, and resistance to change at heart the organization. Fords current OTD time requires production to guess the real demands. Consumer demand is therefore met through a push quite an than a pull manufacturing process. To move to a pull system and to improve demand forecasting, Ford must(prenominal) implement a process that will provide in the first place demand notification to the supplier network.They must also be able to flat link the actual orders to the manufacturing schedule at any of their almost two ascorbic acid manufacturing locations. Purchasing must also move an integral role in this process to insure the correct suppliers are receiving the information. another(prenominal) important tonicity for Ford is to ordinate thousands dealerships to transmit data sales efficiently, Dells business model involves pack manufacturer contact with the consumer, this hugely reduces order time by removing middl e-man interference and inventory requirements.But for the railroad car industry without the dissemination channels will be unthinkable for a potential customer to fall to buy a car without examen it, seeing it and feeling it. For this reason the auto industry lacks this ability. Considering all the issues above and their associated challenges, would be fair to say that Fords multi-layered supply chain is in great need of a technological resoluteness to its information sharing and communication needs. Alternatives 1. honour Fords real supply chain and initiatives of improvement without investing in a new IT platformThe existing initiatives much(prenominal) as FPS and OTD and their overall objectives and their supply cookment goals are a step in the right head upion for providing the necessary data sharing with suppliers and therefore achieve the goals of Fords initiatives. Ford will birth to rely on the actual technology (EDI) such as phone or email in few cases dependi ng if it is a tier 1 suppliers can depend in a more sophisticated tools such as the FRN or the extranet created to connect ford with its suppliers in the B2B initiative.The profit of this is that there will not be major changes and additional cost snarled besides the ones related to the overall SC efficiency, the disfavours of this is that it has been proven that any enterprise which is not up to date with the newest information technologies will not nonplus competitive and in a leadership position indoors mid and long terms, facing the bump of getting behind in a such competitive market. 2. Support Fords FPS and OTD initiatives by creating a narrow IT frame that will help to achieve the virtual integration in Fords SC.The initiatives above must now comprise an advanced IT dissolvent to be linked to the outside groups, tier-2 suppliers and upstream to the scattering network. The IT system will focus on developing the open sharing of real time demand information between the dissemination network and the supplier pool. make headway development of long-term supply contracts with key vendors and a continued focus on the sub-systems supply format will improve confidence while simplifying and speeding the finished process.Building linkages from the dealerships (Also is necessary to invest in the E-business infrastructure) all the way down to the concluding tiers, so the right people get the necessary data in the fashion and time that is needed to improve the SC. The dis receipts of this will be in the short term and probably midterm period, due to all the effort and extraordinary fiscal investment that an initiative like this requires. If the system is poorly chosen, the entire initiative will fail.Technology costs, if not monitored and controlled, can step forward uncontrollably. Also while the platform is usable there may be surprising issues which the staff and suppliers will not be able to solve causing inefficiencies in the supply chain, affec ting Fords and its suppliers revenue directly. The advantage is that with an infrastructure like this Ford will virtually have automated its supply chain translating in achieving Fords initiatives and therefore their ultimate goal Be more fat and a leader automobile manufacturing companyRecommendation I strongly support the instruction execution of alternative number 2. Dells direct business model will be the guideline to issue forth when applying this model in Fords organization. Although there are several major differences between the companies, Dells direct business approach can be applied to every facet of Fords operation. The decision to support virtual integration will help specify Ford as a competitive, cost powerful and profitable company.Instead of be static, Ford must pursue continually evolve along with the new technologies trends, mischance to incorporate the latest information technologies will result in continued inefficiencies and eventually Ford will be displ aced from the automobile manufacturing leading positions. Implementation Stage 1 Accurate and timely information should be the primary focus of the IT implementation. For this lay out, the existing FPS initiative should be combined more extensively with the existing intranet and extranet.Ford should leverage the B2B capabilities to incorporate upstream ordering information from the distribution network. To minimize risk, stage 1 should be applied on a particular proposition product line and only with key suppliers (pilot projects). Initially, the information sharing may be a simple as providing real time demand to suppliers on a secured web site. Stage 2 erstwhile this first stage has achieved quantitative results the IT objective will be to automate the order-to-scheduling process to adapt processes that would notify suppliers of orders and their manufacturing locations based upon every day orders from the dealerships.The objective is to develop information flow upstream from the suppliers. Ford will need to know on an accurate and real time fashion the suppliers separate daily capacities, only then Ford will be able to in effect allocate orders. Control Understanding this challenge, implementation plans will require phasing and adequate training, with learn through at all levels to examine a predictable and comfortable transition.This stage should be split into manageable groups, action plans should be in place for addressing circumstantial challenge areas, such as technically issues. The control will focus in monitoring the KPIs deep down Ford and its suppliers, by this stage the refined IT solution will help to achieve FPS goals such as lower inventories, faster inventory turnovers, leaner manufacturing process, making the overall supply chain more cost effective and responsive, achieving the 15 days lead-time established by ODT. ConclusionFord is an example of a company who can evolve at any stage of its existence it is perpetrate to be leader in the automobile market. They decision to implement major changes within the organization shows the determination to do anything to stay competitive, Ford knows that if they dont slip by up with the new trends, they will turn a loss ground easily over the time. erst again I realize how the information plays the most important role within any organization, the effective and efficient manage of it will smooth any operation helping to achieve the expected results.Whether your company is vertical, horizontal or virtual integrated a key issue is to install based on real requirements delivered in real time. If everything starts with the right step, all of the side by side(p) levels of the SC will enjoy a more organized and efficient process. living these basic ideas with and efficient IT infrastructure will give the ultimate competitive advantage to any company it is applied.In termination if the recommended strategy is implemented successfully and in a timely manner, Ford will be po sitioned to become a ascendent player in the automotive market enjoying great growth and larger profit margins. References Ford Motor Company SC Strategy Case Study Harvard argument School by Robert D. Austin The index finger of Virtual Integration An Interview with Dell Computers Michael Dell by Joan Magretta.